Lufthansa eyes insolvent German rival Air Berlin, to sign deal today

Germany’s largest carrier Lufthansa will sign a deal today to buy parts of its insolvent German rival Air Berlin, Lufthansa’s chief executive Carsten Spohr confirmed, saying: “We will see a milestone in the history of Lufthansa and Berlin today”.

Lufthansa has not confirmed the value of the deal but Air Berlin has confirmed that it has sold a major portion of its assets to the German carrier for around £188.38m, media reports state.BBC has reported that Lufthansa plans to use Air Berlin planes to expand its Eurowings budget airline business.

Another 20 to 30 aircraft are expected to be sold to easyJet, although negotiations are not yet complete.

According to BBC, the Irish airline Ryanair is set to challenge the deal and has announced that it would take Lufthansa to European competition authorities.

Ryanair had previously described the negotiations as a “stitch-up” intended to strengthen Lufthansa. But a Ryanair spokesman told BBC today: “We will be referring the matter to the EU competition authority in due course.”

Air Berlin has reportedly struggled to turn a profit over the last decade and had filed for insolvency on 15 August. It had also taken a government loan to keep its planes in the air while its administrator negotiated with prospective buyers.

Ryanair had earlier criticized the Air Berlin negotiations by calling it a “conspiracy” between Lufthansa and the German government to create a national carrier. Responding to this, Spohr had clarified that this deal would only increase competition. “Competition will intensify in Europe and worldwide. We are assuming further declining prices. Because of antitrust reasons, we cannot simply buy even larger parts of Air Berlin,” he told a regional German newspaper.